Glass House Brands Inc

Second-quarter revenue was $47 million, down from $47.6 million in the same period last year. Gross profit was $15.8 million and gross margin was 34%, versus 55% in Q2 2025; adjusted EBITDA was $5.7 million, down from $18.1 million last year but up from a $4.2 million loss in Q1. The company produced a record 246,000 pounds of biomass, above its 240,000-pound guidance and versus 231,000 pounds last year, at a cost of production of $122 per pound, down from $175 in Q1 and $129 in the second half of 2025. Average wholesale selling price was $211 per pound, above guidance of $185 to $190 and up from $206 last year. Management said it continues to expect about 1 million pounds of biomass for the full year, exit 2026 at more than a 1.1 million-pound run rate, and finish the year with cost of production below $100 per pound; it did not update revenue, gross profit, or EBITDA guidance after the retail spinout.

Kyle Kazan framed the quarter around a major industry inflection point: medical cannabis rescheduling to Schedule III and the company’s preparations for interstate commerce, exports, and research use. He emphasized that Glass House is already DEA-registered, has deconsolidated retail to be fully medically licensed, and is building optionality so it can sell into future markets without relying solely on California. His tone was strongly optimistic and activist, repeatedly arguing that the company’s low-cost scale and California cultivation quality position it for a much larger market if regulations continue to evolve.

Mark Vendetti focused on the mechanics of the quarter and the implications of the retail deconsolidation. He said reported results now include retail only through June 11, with retail revenue of $10 million through the date of deconsolidation and the former retail business now treated separately; he also noted $22 million in cash and restricted cash at quarter end, including a roughly $6 million reduction that moved with retail and $4.9 million raised through the ATM in the quarter. He highlighted that the company terminated $30.6 million of warrants in exchange for 362,000 shares, later issued another 7.4 million shares from warrant redemptions, and said the company has $38 million of uncertain tax provisions on the balance sheet while no longer expecting to recognize 280E going forward.

Analysts pressed on the gross margin miss, and management said the main issue was a higher trim mix, with trim selling around $25 versus flower around $500, plus lower-value trim flowing into inventory. Graham Farrar said the problem was operational and temporary, tied to rebuilding the cultivation team, replanting roughly 3.5 million square feet, and bringing Greenhouse 2 online, while Mark said margins should improve as mix normalizes. Questions also focused on hemp and interstate commerce: management said its hemp work is centered on federally compliant CBD flower and that a delay or change in the hemp ban would mainly create optionality, not risk. On interstate commerce, management said it is already speaking with potential customers and regulators, expects more than one supply agreement before year-end, and thinks international shipments may come before domestic interstate shipments.